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Michigan reinstates its asset test in SNAP, bucking national trend

Friday, September 30, 2011

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Michigan recently introduced a new policy that will reinstate the asset test in the Supplemental Nutrition Assistance Program (SNAP), limiting benefits to people with few or no assets. Beginning October 1, SNAP applicants and recipients will be limited to $5,000 in liquid assets and $15,000 in vehicles.

Over 114 organizations signed a letter to Governor Rick Snyder asking that he suspend the policy.

"Safety net policies like the Food Assistance Program should help families overcome temporary difficult economic times -- asset tests do the opposite," said Assets & Opportunity member Ross Yednock, director of the Asset Building Policy Project at the Community Economic Development Association of Michigan (CEDAM).

Instead of creating opportunities to save and achieve lasting financial security, asset limit tests force families to forfeit their long-term savings and economic self-sufficiency in order to receive short-term, yet vital, assistance. It is public policy that is as short-sighted as it is economically unsound," Yednock said.

Not only does the decision hurt poor families in Michigan, it doesn't make sense from a financial standpoint. Money to pay for SNAP benefits comes from the federal government – not the state of Michigan. Michigan only pays for the administrative portion of the SNAP program, which will actually increase under the new rule change, since the state will now have to verify the assets of the 1.9 million people receiving SNAP benefits. Our friends at New America wrote a scathing blog post detailing the change.

Michigan is bucking a national trend of states eliminating the SNAP asset test. According to forthcoming research from Prosperity Now's Assets & Opportunity Scorecard, 39 states have eliminated the asset test in SNAP as of October 2011; 16 of these states eliminated the asset test in the past two years.

For more information about SNAP asset limits, see our Resource Guide on the topic.